3,000 job cuts in Barbados public sector after Christmas

by Ricky Jordan Tue Dec 17, 2013

As soon as the Christmas holidays end, over 3,000 workers will be cut from the Barbados public sector in a series of drastic measures to stabilize the Barbados economy and stave off devaluation of the local dollar.{{more}}

The move, announced by Minister of Finance Chris Sinckler in a ministerial statement to Parliament Friday, should see the 3,000 lay-offs from the general public service and statutory entities in the first quarter of the New Year, specifically 2,000 on January 15 and 1,000 from March 1.

In his “Black Friday” (December 13) announcement in the pre-lunch sitting of the Lower House, Sinckler said a further 501 jobs would be cut from the sector over the next 16 months of Government’s 19-month adjustment programme, and over 2,000 more jobs would end without being replaced by way of attrition – retirement, resignation, leave or death – over the next five years.

Furthermore, a 10 per cent cut in the salaries of all ministers, Government Members of Parliament, parliamentary secretaries, personal assistants and other political appointees will occur in 2014, while travel budgets of all ministries and statutory boards will be slashed by half, a freeze put on all non-statutory discretionary waivers for the next three years, and another freeze on the payment of increments over the next two years.

Stating that “this route is now simply unavoidable,” Sinckler told the hushed Lower Chamber that on the current trajectory, with revenue declining at a rate of 10.7 per cent, but with reductions in expenditure at a paltry rate of 0.8 per cent, the country “would in fact be worse off than 2012-2013.”

This, he said, compounded with planned cash injections into the state-owned Queen Elizabeth Hospital, University of the West Indies and Transport Board, would prevent Government from meeting its targets and force it to borrow heavily on the local market at the risk of further haemorrhaging of the country’s reserves which, at the end of last month, were just under $900 million – a dramatic drop from $2 billion two years ago.

Hinting at the possibility of devaluation if these “front-loaded” measures were not immediately taken, Sinckler said: “Should this situation be allowed to continue unchecked, it will undermine the macro fundamentals that support our firm and unshakeable policy of maintaining a fixed exchange peg with the United States dollar.”

In an immediate reaction, Opposition Leader Mia Mottley described the lay-offs as the “ultimate betrayal” of the trust and mandate given to Government in the February general election.

“I am a very sad, sad person,” said an emotional Mottley from the West Wing of Parliament.

She said the harsh measures were neither a solution to the country’s economic difficulties nor an aid to recovery, and dubbed it the third failed attempt at recovery, following Sinckler’s medium- term fiscal strategy and revised medium-term strategy.

Describing it as a mere “arithmetical necessity” put together to “slow the process of the International Monetary Fund (IMF) telling the world what we already know locally” and to impress an IMF team which left Barbados yesterday, Mottley said the measures had not addressed issues of competitiveness, restructuring, Government spending or the economy.

The Congress of Trade Unions and Staff Associations of Barbados and Barbados Private Sector Association said Government had not consulted with the congress and private sector representatives grouped under the Social Partnership before announcing the lay-offs.

President Cedric Murrell said this had done “deep harm to the deliberations of the sub-committee of the Social Partners.”

Bridgetown shoppers and those following the issue online hammered Sinckler for his poor timing, just 12 days before Christmas, stating that while they knew job cuts were necessary, it would be a difficult New Year for many.

Sinckler, in his 45-minute statement, said the country could not hope to “cut or tax our way out of this economic decline,” and reiterated the need for private sector investment and the removal of all obstacles to investment by domestic or foreign investors. He also pointed to some major public sector investments which Government was willing to do on its own or through private/public sector partnerships, and which he felt could turn around the economy.

Expressing empathy with “the anguish” of those affected, Sinckler said all efforts would be made to safeguard their rights and to assist in retraining and redeployment.

He added, however, that the measures were seeking to accelerate growth, since wages and salaries had increased from $468.6 million to $473 million from 2012 to 2013, the deficit had risen from $378.2 million to $511.1 million, revenue was down by $135 million or 10.7 per cent from last year, Value Added Tax receipts had decreased by $ 42.2 million, and receipts from taxes on incomes and profits had fallen by 30.5 per cent.

Sinckler said Government had “done its utmost” to keep public sector workers employed over the last five years, but based on the current situation and projections, could not continue on the current course.

rickyjordan@nationnews.com